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Buying bitcoin with Coinmama | Review

6 December 2018

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Coinmama Cryptocurrency Marketplace

Coinmama Exclusive Promotion:30% off trading fees for first time traders.

Do Coinmama’s strengths outweigh its limitations? Our review can help you decide.

Coinmama is one of the more popular bitcoin marketplaces out there, boasting over 200,000 customers and selling both bitcoin and Ethereum to verified users.

There are many reasons to buy bitcoin: for investment purposes, to spur adoption of an all-digital currency or as a means to transact business anonymously. As the price of bitcoin has skyrocketed, so too has interest in this and other cryptocurrencies.

Coinmama is a solid platform to buy your bitcoin or Ethereum with a credit card. However, you can’t sell your bitcoin through the site, and its fees quickly add up. Should these drawbacks prevent you from using Coinmama? Let’s discuss the pros and cons.

Cons

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific
provider, service or offering. It is not a recommendation to trade.

How does Coinmama work?

Coinmama has been selling bitcoin for several years, and the process for buying bitcoin is reasonably straightforward. First, you create an account with the site. This requires your name, email address, and country of residence. You can buy a single bitcoin, multiples, or fractions, down to as little as 0.1 bitcoin. Before you can complete the purchase, however, you must have your own digital wallet and you must be verified. Verification requires you to provide Coinmama with proof that you are who you say you are. You do this by uploading a copy of your passport or driver’s license.

Which cryptocurrencies can I buy?

However, you cannot sell your bitcoin tokens back to Coinmama, nor does the service connect you with possible buyers. The company says a sell-side function is “coming soon.” For now, if you want to sell your digital currency, you’ll need to use a different service.

Available countries

CoinMama is currently available in 226 countries worldwide, and also accepts all local currencies.

Importantly, Coinmama only allows residents of the following US states to transact:

Arizona

California

Colorado

Florida

Illinois

Indiana

Kansas

Kentucky

Louisiana

Massachusetts

Maryland

Michigan

Missouri

Montana

Nevada

New Jersey

New Mexico

North Carolina

Pennsylvania

South Carolina

Tennessee

Texas

Virginia

Wisconsin

Which payment methods are accepted?

Visa

Mastercard

Cash (via Western Union transfer)

Coinmama supports Visa and Mastercard credit or debit cards via the Simplex payment system. If you are paying by cash, you must use Western Union. Coinmama does not let you link your bank account or support other wire transfers.

How much will it cost me to use Coinmama?

The company charges a 5.5% transaction fee for each purchase. If buying with a credit card, there is an additional 5% fee assessed by Simplex, Coinmama’s credit card processor.

Fee

Transaction fee

5.5%

Credit card purchase fee

5%

Cash advance fee*

*

*Note: According to Coinmama, some banks and credit card issuers consider buying bitcoin to be the same as a cash advance, and will charge users hefty fees to expedite the transaction. This is not a Coinmama fee. Make sure your credit card doesn’t add on any cash advance fees when you buy bitcoin. If they do, dispute it, which just might get you a refund.

Buying $1,000 of bitcoin on Coinmama

Let’s consider the actual cost to you if you wanted to buy $1,000 worth of bitcoin through Coinmama. (FYI, at the time of writing in September, 2017, the price of one bitcoin is just above $4,500.)

Coinmama Purchase

Rate

Cost

Bitcoin

Real-time

$1,000

Coinmama fee

5.5%

$55

Credit card purchase fee

5%

$50

Cash advance fee

Dependent on bank or credit card issuer

Unknown

Exchange rate fee

Coinmama prices are set in USD and Euros. If you are using another currency, your bank or credit card may assess a currency exchange fee.

Unknown

TOTAL KNOWN COST

$1,105

It will cost you at least $1,105 to buy $1,000 worth of bitcoin using Coinmama. It might even be more, if you are assessed a cash advance fee or a fee for using a currency other than US dollars or euros.

What is a rate lock?

The price of bitcoin can fluctuate wildly. So much so, that some sellers may actually change your order even after the transaction is registered. This is not the case with Coinmama. Coinmama “locks” the crypto rate at the time of purchase. This means you will receive exactly the amount of bitcoins you ordered, regardless of whether the price went up (or down) between the time you placed the order and when you receive your coins. This purchase assurance, however, comes with a cost. Coinmama’s price, while competitive, is typically not the lowest out there.

How soon can I get my bitcoin?

It can typically take a few hours until you receive your bitcoin assets, despite the straightforward process. First, it can take the blockchain a few minutes to confirm a transaction. This is so, no matter who you buy your bitcoin from. Then, your credit card issuer, or Western Union if using cash, may take up to several hours to confirm payment. Lastly, Coinmama won’t send your coins until you’ve confirmed your digital wallet address. In summary, the following factors will dictate how quickly you will receive your bitcoin.

Time for bank or credit card processor to verify funds

Time for you to confirm your digital wallet address

Time for the blockchain to confirm each transaction

Fortunately, Coinmama is selling from its personal holdings, unlike other service providers or brokers, and this significantly expedites processing time.

Are there any transaction limits?

Coinmama has limits based on cash purchase, credit card purchase, and verification status. There is a daily limit of 5,000 USD/EUR per day, whether paying with cash by Western Union transfer, or credit card. If you are paying with a credit card, you are limited to 20,000 USD/EUR per month.

What about lifetime purchase limits?

Coinmama places limits based on what it terms “verification levels”. There are three levels:

Level 1: $10,000 limit

Level 2: $50,000 limit

Level 3: No limit

For Level 1 status, Coinmama requires each user’s name, address, date of birth, email, phone number and a photocopy of a verifying document, typically a passport or national ID or government-issued driver’s license. It can take Coinmama from several hours up to an entire day to review your documents and verify your status.

If you want to purchase more than $10,000 in bitcoin – Level 2 status – you must provide a copy of both your passport and driver’s license, or similar identifying documents. Not just one. Coinmama may even require you to upload a selfie of yourself holding these documents.

Ready to go bigger? Level 3 status has no total purchase limits. To get to Level 3, you must contact Coinmama support directly and they will provide further instructions.

Note: Total purchase limits based on verification levels do not alter the daily and monthly spending caps.

Is there a minimum purchase?

Yes, the minimum you can buy is $60 although the lowest amount of bitcoin Coinmama sells is 0.1 bitcoin, which is currently priced above $60. This effectively means the minimum purchase is whatever is the listed price of 0.1 bitcoin.

Is it safe to use Coinmama?

Coinmama is a registered money service business based in the Slovak Republic. The company has been offering bitcoin for sale for several years. Coinmama is considered a reputable place to transact bitcoin purchases, however as with all things digital – particularly with everything crypto – there is always an element of risk.

Customer support

Coinmama offers support via email only, however the site’s FAQ and service desk support documents are reasonably comprehensive and easy to understand.

Coinmama pros & cons

Pros

Live pricing in US dollars and euros

Buy fractions of a bitcoin

Easy to review all your orders

Buy direct from the site – no middleman

Multi-language site

Cons

Cannot sell bitcoin through Coinmama, only buy

Does not accept PayPal, American Express or Discover

Can’t link to your bank account to expedite new purchases

No smartphone app

Next steps

To get started with Coinmama, register for an account on the platform’s website. It’s then just a matter of choosing which cryptocurrency you’d like to buy, complete payment and confirm your wallet address.

Before buying bitcoin – or any digital currency – you will also need to have a secure digital wallet. Once this is completed, you can store your bitcoins there and use this wallet to purchase goods and services online. It’s also useful to learn more about bitcoin and blockchain.

Image source: Coinmama

Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly
volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of
future performance. Consider your own circumstances, and obtain your own advice, before relying on this information.
You should also verify the nature of any product or service (including its legal status and relevant regulatory
requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may
have holdings in the cryptocurrencies discussed.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.

2 Responses

adeelFebruary 1, 2018

we are runing a company where we nee 100 btc on daily basis how much fee you will charge how much time will taken for getting 100 after payment process

A gentle reminder, we do not represent Coinmama or any of the companies that we feature in our pages.

Nevertheless, when buying BTC with Coinmama, depending on your payment method, they charge 5.5% for every transaction and another 5% if you are going to use a credit card. So, in the given example above, for every $1000 worth of Bitcoin purchase, there will be a $55 fee. Please also note that other fees like if you’ll use your credit card, CA and FOREX conversion (if applicable) are not yet accounted for.

Please click on the green ‘Go to site’ button above if you wish to be redirected to the official site of Coinmam and process your BTC purchase from there.

I hope this helps.

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